25 Nov 2019 18:32
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.
25 November 2019
ContourGlobal plc
ContourGlobal Announces Closing of Acquisition of Combined Heat and Power Portfolio in Mexico from Alpek
ContourGlobal plc (the "Company") is pleased to announce that it has closed the acquisition of two natural gas-fired combined heat and power ("CHP") plants, together with development rights and permits for a third plant (the "Acquisition") from Alpek S.A.B. de C.V.("Alpek").
The Acquisition was signed on January 6, 2019 for a Purchase Price of $724 million subject to customary adjustments such as for working capital. There is a further payment of $77 million payable to Alpek representing the Value Added Tax (VAT) assessed for the Acquisition which is expected to be refunded in full within 12 months of closing.
The portfolio acquired consists of 518 MW of operational capacity located on Alpek's petrochemical sites in the Mexican states of Tamaulipas and Veracruz-the 414 MW plant known as CGA1 and the 104 MW plant known as CELCSA, respectively.
When the Acquisition was signed in January 2019, CGA1 was still under construction and as announced at the time, closing of the Acquisition and transfer of ownership of the facilities to ContourGlobal would only occur when construction of CGA1 was complete and all commissioning and verification tests had been successfully passed. By conditioning closing upon CGA1's successful entry into commercial operations, ContourGlobal avoided taking construction and commissioning risk for the power plant, which has an anticipated 40-year asset life. The CHP assets are fully contracted such that as of the closing date approximately 98% of their power plus all of the steam generation is under long-term contract, greater than the 90% announced at signing. As previously announced, the CHP business is expected to generate approximately $110 million of Adjusted EBITDA on a full-year basis which is not subject to seasonal variation. To finance the Acquisition, ContourGlobal entered into an attractive $535 million amortizing non-recourse project financing with The Bank of Nova Scotia at a debt to EBITDA leverage ratio which is better than that expected when the transaction was first announced.At the Interim Results Announcement on 8 August 2019, the Company expected 2019 full year Adjusted EBITDA to be in the lower half of the previously announced guidance range of $720-770 million. While underlying trading remains inline, consistent with the delay in closing from Q3 into Q4, the Company now expects the 2019 full year Adjusted EBITDA to be modestly below the bottom end of the previous range.
Joseph C. Brandt, President and CEO of ContourGlobal commented:
"With the acquisition of these two power plants we are delighted to expand our Solutions business into Mexico and to commence operating this world-class, highly efficient low carbon Combined Heat and Power business for Alpek and other commercial clients in Mexico. We have developed our Solutions business over the past decade with blue chip clients like Alpek and look forward to growing with them in the future.
The Acquisition is a further example of our commitment to pursue high quality growth through operationally led strategic acquisitions. The assets are consistent with our strategy of developing and operating long-life power assets, backed by multi-year offtake agreements delivering high quality hard currency revenues and financed on a non-recourse basis. We are grateful to The Bank of Nova Scotia and the syndicate arranged by them for supporting this important acquisition."
ENQUIRIES
Investor Relations - ContourGlobal plc
Alice Heathcote
Tel: +44 (0) 207 355 7333
investor.relations@contourglobal.com
Media - Brunswick
Charles Pretzlik/Simon Maine
Tel: +44 (0) 207 404 5959
Contourglobal@brunswickgroup.com
About ContourGlobal
ContourGlobal is listed on the premium segment of the London Stock Exchange (TKR: GLO). ContourGlobal is an international owner and operator of contracted wholesale power generation businesses with approximately 4,841 MW in operation in 18 countries. ContourGlobal operates a portfolio of 107 thermal and renewable power plants across Europe, Latin America, and Africa utilizing a wide range of technologies.